The pharmaceutical industry is faced with a myriad of changes in vision, concepts, technologies and products. Business demands more, better, faster, and cheaper. There is commercial pressure to push more products to market each year. With competition for a limited pool of skilled resources leading to a real capacity gap, PA's Value-Add Resourcing (VAR) provides a robust and defensible approach to effective planning.
Does resourcing need immediate attention?
Companies are not using outsourcing strategically but as a means of containing costs by reducing fixed overheads, which prevents companies from concentrating on core competencies
Relationships with CROs and clients continue to evolve and range from purely transactional to preferred supplier agreement - strategic relationships hardly exist.
All these issues will impact resourcing, but experience shows that organisations currently have no complete view of that impact, or how to deal with this by effective planning.
Key business questions for the pharmaceutical industry
This raises some key business questions for the industry:
- How do you determine the severity of the impact of changes?
- How do you know if adequate capacity exists to meet your corporate objectives?
- How do you maximise cost-effectiveness in resourcing?
- How do you determine what are the value-add activities (ie, that provide competitive advantage) in your organisation?
- How do you leverage internal resources on value-add activities?
- How do you prevent employee 'burn-out' due to unsustainable overwork on activities that are not value-add?
- How do you resolve conflicting demands for resources between corporate infrastructure and activities essential for meeting corporate goals?
- How do you know if qualified and competent external providers exist to help you address your short and long term needs?
- How do you outsource effectively to address resourcing demands without compromising your intellectual property?
Due to the nature of the pharmaceutical industry, and some of the uncertainties surrounding it, in the months approaching key deadlines/decision points timelines get compressed, resulting in increased workloads, extensive tactical outsourcing, an inability to complete important project activities, quality issues, and a resource base 'stretched to its limit'. The necessity for strategic resourcing becomes very evident.
A defensible solution that cuts out the guesswork
The solution is to take a rigorous view of resourcing to facilitate achievement of your corporate goals - one that tells you where you are, shows you where you need to be, and directs you how to get there. Most companies develop their own resourcing strategy, but they build a future based solely on guesswork.
PA Consulting Group has developed Value-Add Resourcing (VAR) to help organisations develop a robust and defensible resourcing investment plan, based on real, current data, and an examination of the current and future requirements to optimise performance. A resourcing investment plan that incorporates a comprehensive understanding of real issues maximises the probability of success in meeting corporate goals.
What VAR does
VAR provides a structured approach to performing a diagnosis of the current state of an organisation or department, and the mechanisms to use this information for the development of an optimised Resourcing Investment Plan. It enables an organisation to:
- Assess current resourcing practices
- Quantify future capacity requirements
- Provide a framework for evaluating and prioritising resource requirements
- Provide innovative resourcing options
- Guide investments towards leveraging and developing internal capability
- Evaluate the ability of external provider market place to meet potential outsourcing needs
- Determine the focus of strategic developments with external providers
- Develop a robust and defensible Resourcing Investment Plan that maximises the value of internal and external resources to support a managed portfolio.
Value-Add Resourcing methodology
Three stages
The Value-Add Resourcing methodology comprises a three-stage process:
Stage 1 : 'Where are we now?'
Data capture - identification of value-add activities that provide the organisation's competitive advantage. Through workshops, facilitated sessions and individual effort, information is gathered about the way the organisation or department carries out its work
The underlying principle of VAR is leveraging internal resources on those activities deemed to be value-add. In order to determine which activities can be identified as value-add, the group must agree upon how to define value-add and how these criteria can be applied to the organisation's/department's activities.
Stage 2 : 'Where do we need to be?'
Data analysis - strategic business analysis that ensures alignment with corporate, divisional and departmental goals. This determines resource requirements (highlighting long-term investment), reviews and evaluates the output and assumptions and decisions made in Stage 1, and uses insights gleaned to draw preliminary conclusions. This forms initial views on resourcing options, which are evaluated against the business context. The result is the framework for a resourcing and investment plan.
Stage 3: 'How do we get there?'
Resourcing investment plan - a business and organisational strategy for resourcing that builds on the framework for recruitment and outsourcing plans that emerged from Stages 1 and 2. It takes into account customers, suppliers, stakeholders and the impact of process improvement and technology.
The Resourcing Investment Plan is incorporated into the organisation or department's business plan to formulate the resourcing section of the corporate or departmental strategy. Stage 1 data provides the supporting information for the resourcing plan. Stage 2 data provides the projected resource and associated cost requirements, assumptions, insights and resourcing options that must be taken into account.
A senior management team is vital - wherever VAR is applied
The VAR process can operate at an organisational or departmental level within an organisation. Either way, a team of key people needs to run and drive the exercise, and several key factors will help ensure success:
- To maximise the chance of a successful outcome, a 'top-down' approach must be applied to the VAR process - starting VAR at the corporate level, then filtering down to the individual departments to ensure compliance.
- It is also essential that several measures be put in place at the organisation's management level to help ensure that VAR is regarded appropriately by the departments and implemented with the full backing of senior management.
- Senior management are instrumental in ensuring momentum and motivation through the central stages of the exercise.
Format of activity
Each stage of the process comprises a series of interviews, one-on-one support meetings, small work sessions and facilitated workshops. Work sessions are made up of small working groups of experts or people with relevant interests. Facilitated sessions are more geared towards the presentation and discussion of results, with the purpose of getting consensus on, for example, issues or data; they usually involve the full team, along with specifically invited participants.
Duration of activity
The duration of the exercise depends on factors such as: size and complexity of the organisation; the level at which the exercise is performed; the availability of key people ; the availability of good metrics on internal and external resources and costs.
A typical exercise at departmental level takes four to six weeks for Stage 1, three to four weeks for Stage 2, and two to three weeks for Stage 3. At organisational level, it takes considerably longer.
When should VAR be run?
VAR is not a one-off process. Optimum value is gained from running the exercise annually to add the resourcing input to the organisation's or department's operating plan. As business is constantly changing, it is valuable to re-visit the business issues that resulted from the exercise and to make the appropriate adjustments to the RIP. It also provides performance measurement to ensure that the implemented changes are achieving the expected results. The more VAR is undertaken, the simpler the process becomes, as the framework is established and each execution builds on the achievement of the previous exercise.
The benefits of VAR - the path to achieving corporate goals
Our experience in working extensively in the pharmaceutical industry has shown that many companies have failed to recognise the importance of strategic resourcing, or the benefits of having an effective resourcing strategy in place. What is needed from a corporate perspective, and from the lower levels of the organisation, is an investment plan that can be substantiated. VAR does this by providing the following:
- A structured approach to analysing an organisation's current status and costs, providing a thorough and consistent view - quantitative, defensible, driven by example
- An 'at-a-glance' view of issues within the organisation
- An approach to minimise risk due to potential loss of intellectual property through outsourcing
- A clear and consistent understanding for all levels of management as to where Value-Add resides within the organisation
- A horizon-driven corporate plan that optimises the use of resources without jeopardising projects
- A method to manage external providers strategically, maximising their value
- Motivation (and retention) of staff by enabling them to focus on Value-Add activities.
All of this provides the basis for a defensible Resourcing Investment Plan.
